How many of the following are reasons for a company to declare a share dividend (bonus issue)?
$\bullet$To reduce the market price of their shares.
$\bullet$To capitalise the retained earnings of the company.
$\bullet$To conserve cash.

Question

Quizplus · Accepted Answer

All three reasons are valid for a company to declare a share dividend: reducing the market price of their shares makes them more affordable, capitalizing retained earnings increases shareholder equity without requiring cash outlay, and conserving cash since dividends are paid in shares instead of cash.

How Many of the Following Are Reasons for a Company ∙\bullet∙

How Many of the Following Are Reasons for a Company $\bullet$